Now cos are sold on the net!

Agencies|

May 22, 2007, 02.00 PM IST

0Comments

SAN FRANCISCO: What do Beanie Babies, Pez Dispensers and troubled Internet companies have in common? They're all for sale on eBay.

More than 10 dot-coms have recently sought buyers on the popular auction site. Search engine DigForIt.com sold for $25,400 this month after promising bidders "great revenue potential." SynapseLife, an online calendar and organizational site, sold for $60,000 despite warning it had "no advertising revenue."

Corporate acquisitions are usually handled by investment bankers or merger experts. EBay is best known for consumer goods. Still, entrepreneurs are turning there because deals are simple, fast and cheap. "On eBay, you have it closed within a month," says SynapseLife co-founder Mark Michael.

Jessica Livingston, a venture capitalist with Y Combinator, says she's hearing it more: "My company's not taking off. Let's see if I can make some money on eBay."

Kiko, a company that received some funding from Y Combinator, seems typical. It is one of dozens of small firms created during the current Internet boom, often called Web 2.0. But the online calendar service floundered after search giant Google launched a competing product.

Founders Justin Kan and Emmett Shear, who had already spent years on the site, wanted to move on. They offered the company's intellectual property - mainly computer code and rights to the Kiko name - on eBay last year. Software site Tucows was the final bidder, paying $258,100. (Kan and Shear went on to found Web broadcaster JustinTV.)

There's no way to know how many companies are following Kiko's lead, since eBay doesn't have a Web 2.0 category, says spokesman Brad Williams. Most fall into a business category that includes everything from software to hot dog carts.

Livingston says she hopes the trend doesn't become widespread. The Kiko deal worked well because the founders wanted a fast, simple separation. But most deals require legal paperwork best handled by a professional, she says.

It's also unclear whether acquiring companies want to buy on eBay. Jim Mansfield, CEO of Web marketing firm Intela, watched the 2006 eBay auction of ad company CrispAds with interest. But he didn't feel comfortable making a bid without knowing the company better.

The CrispAds auction, with a minimum price of $90,000, ended without a bid. Months later, Mansfield worked with a broker to buy the company for "a few hundred thousand dollars," he says.

That's not stopping others. Dale and Brian Beermann recently tried to sell their company, MyOutdoors.net. Instead of putting the company up on eBay, they listed it on two smaller sites, Web 2.0 for Sale and Buy Biz Sell.

Offers came in, but none as good as hoped. Now, the brothers are considering "another go at it," Dale Beermann says.